IT layoffs: Technology is biggest threat for technology workers in India

Last month, Sudhakar Choudhari took the company bus as usual from his one-bedroom apartment to the suburban offices of Tech Mahindra, a major employer of workers in India that powers the global technology machine behind the scenes. Then a manager took him into a conference room and asked him to resign.

“It was a terrible scene for me,” said Choudhari, 41, who had been with the company for 11 years and most recently maintained software for a British client. As the manager spoke, he thought: “I have an 11-year-old child. My wife is not working. How to pay the home loans?”

Choudhari is one of a number of Indian technology workers who have lost their jobs in recent months as many in India debate whether an industry that has long served as a gateway to the middle class is preparing to shed jobs en masse.

India’s information technology industry grew at a breakneck speed over the past two decades thanks to the trend commonly called offshoring. The industry and related businesses generate more than $150 billion in annual revenue and employ about four million people to build and test software, to enter and analyze data, and to provide customer support for American and European companies looking for relatively inexpensive labour.

But the global tech industry is increasingly relying on automation, robotics, big data analytics, machine learning and consulting — technologies that threaten to bypass and even replace Indian workers. For example, automated processes may soon replace the kind of work Choudhari was performing for foreign clients, which involved maintaining software by occasionally plugging in simple code and analyzing data.

in India and an adding of jobs onshore,” said Sandra Notardonato, an analyst and research vice president for Gartner, a research and advisory company. “Even if these companies don’t have huge net losses, there’s a person who will suffer, and that’s a person with a limited skill set in India.”

Such job losses could be politically damaging to the government of Prime Minister Narendra Modi, who won an electoral mandate in 2014 on the promise of development and employment for a bulging youth population. In January, near the three-year mark of his administration, an economic survey reported that job creation had stalled.

So far, the scale of the impact is not clear. T V Mohandas Pai, a longtime industry figure, estimates the cuts will encompass up to 2 per cent of the work force by September, mainly from culling underperformers. A 2015 study released by the National Association of Software and Services Companies(Nasscom), the Indian technology industry trade group known as Nasscom, and McKinsey India found that 50 to 70 per cent of workers’ skills would be irrelevant by 2020.

Of course, new technologies will create new jobs. The impact of automation and artificial intelligence still is not clear, and they could open up new areas that simply shift tech work rather than eliminate it.

But some in the Indian tech industry worry that many of the new jobs will be created outside India, in places like the United States, in part because President Trump has pledged to tighten visa laws that allowed many Indian nationals to go to that country to work. The subject is likely to pop up on Monday, when Modi is scheduled to visit the White House.

The Indian government has rushed to reassure the public that job losses will be minimal. Ravi Shankar Prasad, the Indian minister who oversees the technology industry, recently denied that major layoffs were occurring even as he encouraged the industry to speed up development.

“The question of slackness in jobs is absolutely factually incorrect,” he said. “Obviously, those who don’t perform will have to go.

Some tech employees who recently lost jobs disputed that they were underperformers.

“It is not something that only the employee is responsible,” Choudhari said of upgrading his skills. Employers, he said, “are also responsible.”

For India, where household income by one measure is one-twelfth that in the United States, such jobs have long been seen as a steppingstone. Small-town and rural youths who aspire to join the urban middle class enroll in four-year university engineering programs and graduate by the hundreds of thousands per year, many with the dream of a lifetime career at one of India’s outsourcing companies.

Competition is already fierce. Ashwin Kotnala graduated this year with a bachelor’s degree in technology from Graphic Era University, a private university in Dehradun in northern India. She has applied for more than 20 positions but has yet to get one.

“Everyone wants to work with IT firms because of a good salary,” Ms. Kotnala, 22, said. “I’ve not got placed, but if I get placed in IT company, then I’ll do better and make my parents proud.”

Finding a job can be even harder for experienced workers who need to refresh their skills.

Dinesh Shende, a 38-year-old developer at Tech Mahindra who said he was forced to resign in February, looked for work for months. Born to farmer parents in a village in Maharashtra, he earned about $37,000 a year.

“Now employers say reskilling is needed — it is your responsibility,” he said. “We are ready to reskill ourselves. But will the next company employ us?”

He found a new job last week, at a start-up in Bangalore, meaning he would have to move and leave his wife and children behind in Pune. He declined to say whether he would take a pay cut.

“The next employer will try to take benefit of the situation,” Shende said. To other job searchers, he advised: “Keep trying, keep trying, keep trying.”

Tech Mahindra representatives did not respond to multiple requests for comment by either phone or email. With its profitability declining, the company has been reshuffling its operations and work force.

“As you know, the talent factors are changing, the technology is changing, consumers are changing,” C P Gurnani, Tech Mahindra’s chief executive, told investors in a May conference call, “and we need to make sure that our people are changing with the time.”

In some places, tech workers are showing early signs of organizing, which industry leaders say could lead to unions and then to government interference, which could hurt competitiveness. In Pune, 47 workers from Tech Mahindra and other India-focused employers, including the local arms of Cognizant Technology Solutions of the United States and Vodafone of Britain, have signed petitions alleging forced resignations and baseless firings to the local labour commissioner.

Cognizant said the allegations were “totally unfounded,” while Vodafone did not respond to requests for comment. R Chandrashekhar, president of Nasscom, the industry group, said in May that the industry would remain a “net hirer” but that automation would eliminate some types of jobs.

Many of those who have lost their jobs have not given up.

Choudhari graduated in 1997 with a degree in engineering. He took out a loan for his apartment in 2006, payments that he’ll have to meet for 10 more years. With two months’ pay and a bonus for 10 years of service giving him about $3,200 upon leaving, he does not know how he’ll make them. So far, he has managed to secure just one unsuccessful job interview.

“Basically I’m from a poor family,” he said. “This is a profession where I thought I could do something good.”